Talos Energy Benefits Greatly From Stone Energy Merger
The completion of the merger between Talos Energy Inc. and Stone Energy Corporation sent out shockwaves that could be felt throughout the energy and production industry. Skeptics of the decision on the part of Talos CEO Tim Duncan to seek the merger cited the immense size of Stone Energy and the company’s bankrupts status is evidence Duncan was making a critical mistake.Tim Duncan remained undaunted by the criticism and knew that the opportunity to obtain the public listing that would gain through the merger was well worth any potential complications he and Talos would endure from making the deal. And now that the deal is complete it is evident that not only was Duncan correct about the public listing but Talos Energy is now enjoying other benefits from the merger.
The combined resources that are now under the Talos Energy umbrella following the merger means that the company will now be able to produce 47,000 barrels of oil on a daily basis and the assets the company controls have been proven to contain 136 million barrels of oil reserves.
Talos announcing once the merger was completed that it had a new credit facility agreement in place with a $600 million borrowing base, half of which is available immediately. The company also possesses $450 million in liquid assets with $150 million of these assets represented as cash on hand. The increased flexibility of finances enjoyed by Talos Energy along with the company’s ability to navigate market pressures is a great setup for the company to realize more innovation in the industry.
The Tim Duncan Effect
As an independent oil and gas company, Talos Energy can greatly benefit from both the leadership qualities and knack for forward thinking possessed by CEO Tim Duncan. Duncan has shown the ability to see the value in distressed assets that many times is not discernible to Talos competitors. One example of this was the company’s 2005 acquisition of Phoenix Field, which is now their most valuable asset. The field was at the time controlled by Chevron until Hurricane Rita caused the 13,000-ton platform to capsize and drift away in the Gulf of Mexico. Only Tim Duncan was interested in the cleanup and acquisition of the asset. Today, Phoenix Field is responsible for 16,00 barrels of oil daily.
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